The Netwealth Group Ltd (ASX: NWL) share price is one to watch after reporting strong earnings growth in its FY20 annual results.
What did Netwealth announce?
The Netwealth share price could be on the move in early trade after today's full-year results announcement.
For the year ended 30 June 2020 (FY20), Netwealth's underlying earnings before interest, tax, depreciation and amortisation (EBITDA) climbed 24.8% to $64.8 million.
The group's EBITDA margin totalled 52.3% for the year while underlying net profit after tax (NPAT) surged 21.7% to $43.8 million.
Total income increased by 25.5% to $123.9 million with Platform revenue of $121.3 million, up 25.9% on FY19 numbers.
The group's operating expenses jumped 26.2% as part of Netwealth's strategic investments in IT infrastructure, people and software to support further growth.
That includes adding 68 more employees to its team with a total headcount of 339 as at 30 June 2020.
Paying dividends
The Netwealth share price is one to watch this morning after announcing a fully-franked final dividend of 7.8 cents per share.
The group's funds under administration (FUA) rocketed 35.0% higher to $31.5 billion. That included record FUA inflows of $9.1 billion during the year.
Funds under management (FUM) totalled $7.3 billion with Managed Account FUM of $5.8 billion at year-end.
Transaction fee revenue increased from 6% to 9% during the year as the group looks to diversify its earnings streams.
Platform revenue as a percentage of average FUA was down 4.4 basis points to 0.437% for the year. Average account size increased to $385,000 in FY20, up from $323,000 in FY19.
Looking ahead
In terms of outlook, Netwealth will launch the first of two new active funds on its wealth management platform. Those are the Magellan Global Specialist Series Infrastructure Fund and Magellan Global Specialist Series Global Fund.
Netwealth also noted transaction revenues may soften depending on market volatility and investor behaviour in FY21.
There were no firm updates on the coronavirus pandemic with Netwealth to "continue to assess and monitor any further impacts".
How has the Netwealth share price performed this year?
It's been a good year for shareholders as the Netwealth share price has surged 65.2% higher to $13.00 per share.
That's a good result given the S&P/ASX 200 Index (ASX: XJO) has slumped 9.0% lower.
The wealth management platform provider has a market capitalisation of $3.1 billion and is trading just shy of its $13.44 all-time high.
